Stock brokers' fees

PippiShortsock

Hi

I’ve been advised to sign up with a particular stock broker for an execution-only service. Their management fees are 0.25% of the portfolio value annually, plus dealing charges of 1% for a consideration up to £20,000, 0.75% for the next £40,000 and 0.5% thereafter (minimum charge £40).

I'm assuming this means that selling, say, a shareholding worth £30,000 would incur a dealing fee of £275. This sounds extraordinarily high, especially given the rates charged by various online fund and share supermarkets. Is this typical of more traditional brokers or is it excessive even for them? Or have I misunderstood the fee structure?

Thanks for any advice you can give me.

Pippi

Biggles

PippiShortsock wrote: »

I’ve been advised to sign up with a particular stock broker for an execution-only service. Their management fees are 0.25% of the portfolio value annually, plus dealing charges of 1% for a consideration up to £20,000, 0.75% for the next £40,000 and 0.5% thereafter (minimum charge £40).

I would think that the person 'advising' you will get a cut of those fees.

Try checking a list such as this for a reasonable example of what an online execution-only broker would charge:- http://the-international-investor.com/comparison-tables/uk-international-stock-brokers

jimmyss1

The sort of fee structure quoted in the original post is typical of traditional brokers who executes deals over the phone. They don't provide any online dealing.

If, however, the fee structure above is for online dealing, then it seems quite expensive. Typically, for online dealing you would expect to pay around £10 per deal.

PippiShortsock

Thank you very much for your responses. I think Biggles might be right that the adviser (my solicitor) could have an interest in me selecting that broker. I've decided not to and to look into the brokers listed in the link you posted.

Biggles

PippiShortsock wrote: »

the adviser (my solicitor) could have an interest in me selecting that broker

Solicitors aren't generally known as reliable financial advisers.

gkerr4

those fee's are horrific!

if it is "execution only" you are looking for then you should be paying a fraction of that and no management fees at all. There is a selection of platforms meeting that criteria.

jonesjw

If you want to buy overseas stocks as well, check the cost of foreign exchange conversions. These typically vary from 0.5% to 2%.
2% is just too greedy.

sabretoothtigger

Spread size is the largest cost of all in share dealing for the people who buy decent amounts ie. £10,000 +

But when they charge you 1% anyway that does seem off, spread size on ftse companies is less 1% and any normal broker will realise that for you.
My own broker, I flip 50p in his hat and its a deal but often the quote or spread cost is not the best but then Im dealing pauper size deals not 10k

Totton

PippiShortsock wrote: »

Their management fees are 0.25% of the portfolio value annually, plus dealing charges of 1% for a consideration up to £20,000, 0.75% for the next £40,000 and 0.5% thereafter (minimum charge £40).

Hi,
Those costs seem high to me, much akin to the old stockbroker fees we paid back in the 80's. I currently pay £11.95p per trade for equities and even that is quite high these days, however my annual fee is a fixed max of £45 for the management side of things.

I'd be wary of deciding based solely on cost but as it stands that isn't a service I would be signing up for.

HTH,
Mickey